AIP MC Holdings LLC

The stable outlook reflects our expectation that Molycop will end 2021 with adjusted leverage below 5x over the next 12 months, driven by modest growth in adjusted EBITDA and lower adjusted debt. We assume slight sales volume growth in 2021 (pro forma for the sale of AltaSteel) based on strong contracted volumes for 2021 (about 75% in the beginning of fiscal 2021). We anticipate favorable demand conditions for copper and GDP growth in each region where Molycop operates will drive low- to mid-single-digit percent volume growth (pro forma for the sale of AltaSteel) over the next 12 months. We could lower the rating over the next 12 months if: EBITDA margins drop below 12%, causing us to view profitability and

...We expect adjusted leverage to decline below 5x in 2021 from 5.1x in 2020. We anticipate AIP MC Holdings LLC (doing business as Molycop) will continue to improve its adjusted leverage through modest EBITDA growth and debt reduction. Our 2021 volume assumption, about 5% lower than 2020, includes the impact of temporary mine closures at Molycop's customers due to the coronavirus pandemic as well as a full-year impact from the sale of the AltaSteel business in the first quarter of 2020. Our 2021 adjusted EBITDA growth projection is underpinned by 5%-6% growth in EBITDA per ton in 2021 compared to 2020. Good cash flow visibility and moderate capital intensity support Molycop's debt load. Molycop supplies grinding media for mineral extraction to some of the largest and most cost-efficient gold and copper mines in the world. The credit strength of its customers as well as the high contracted volumes at the beginning of each fiscal year provide meaningful cash flow visibility for Molycop. In addition,...

Full Report